The MedAlign company has developed a free market, fee-for-service, quality-based, episode-of-care model for physician reimbursement. The patented MedAlign system (management, software, and model) provides the critical interface between payers and physicians that ensures significant cost reductions and documented success in quality-based episode-of-care payment. The MedAlign system is the solution that successfully aligns the interests of payers, physicians, and patients.

Why We Need Payment Reform:

One of the main reasons for the high cost of healthcare is that traditional fee-for-service pays only for volume of care, not cost-management of care. The solution is not to discard fee-for-service in exchange for central planning. On the contrary, the MedAlign system reforms fee-for-service by reimbursing doctors with a supplementary fee for professional cost-management tied to quality metrics, while maintaining the free-market forces associated with patients having free-choice of physician.

How MedAlign Solves the Problems of Current Shared-savings Models:

The Problem:

The healthcare market is distorted by: 1) third-parties pay the lion’s share of costs, shielding patients from expenses they incur, 2) patients are not informed buyers of healthcare services, the critical element of a properly functioning free market, and 3) physicians are not incentivized to ensure the most cost-effective pathway to high quality care. Patients go to doctors (who in fact are informed buyers) for diagnosis and treatment, but doctors have an inherent conflict of interest, being at least partially the providers of the goods and services they prescribe.

The Solution:

MedAlign reforms the way doctors are paid, aligning the interests of payers, patients, and physicians. Under MedAlign, physicians would continue to be paid fee-for-service payments for what they do. In addition, they would also be paid a fee for managing the cost of the episode-of-care attributed to them, if their cost per episode is less than the benchmark cost, while maintaining quality. Hence, physicians would be paid a fee for their professional services (filing claims as they do now) as well as a professional management fee for their services of managing their patients’ overall care. Total healthcare costs are reduced because doctors have an incentive to treat patients as efficiently as possible.

Patients Want Free Choice of Provider:

A patient having free choice of physician is an important market differentiator for payers. The payer further benefits by having physicians specifically working to guide the patient to make the best clinical and cost-effective decisions. To ensure the highest quality of care, nationally recognized quality measures are monitored by the payer, MedAlign, and the physician, who in turn has access to information on best practices for any given condition.

Can MedAlign Help to Reduce Costs of Hospitals and Other Providers?

The MedAlign methodology is predicated on the fact that although physicians are paid only a fraction of the overall cost of a patient’s healthcare, they actually direct nearly all the costs.

  • Physicians are incentivized to keep the overall costs of an episode below benchmark, subject to quality of care, because their management fee is proportionate to savings per episode.


  • MedAlign is distinguished from other shared-savings models by removing the most problematic concerns of payers, namely incentivizing physicians to focus on cost and quality, while unburdening payers from the most difficult parts of physician contracting as well as most medical management.


An independent third party keeping doctors incentivized to hold down costs is the key element left out of all shared savings models developed to date. Without this third party entity, all shared-savings models are inherently unstable over the long term. Only MedAlign has advocated a plan incorporating an independent entity between payers and doctors: the third leg of the stool. This independent third party is MedAlign, or the MedAlign entity.

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